July 30, 2007

Asia Grain Outlook on Monday: Corn, soybean to swing on US weather

Asian traders booking grain shipments this week may find the price scenario for U.S. corn and soybeans changing continually throughout the week.

In the U.S., Chicago Board of Trade futures for corn and soybean are totally weather-driven. As a rain forecast for the U.S. Midwest changes from day to day, the futures prices of the two rise and fall.

As of Friday, the Midwest weather forecast was for small showers in the early part of the week, which is bullish for corn and soybeans. There may be some showers in portions of the Midwest in the second half of the week.

Wheat prices will keep rising, despite approaching harvest in the U.S., as the European crop has been affected by heavy rains while global demand for wheat remains robust.

In Asia, China's soybean imports are likely to remain buoyant this week, as traders are finding current CBOT soybean premiums attractive, while domestic demand for soybean products is also improving.

Last week, fresh soybean imports by Chinese crushers were a little more than 10 cargoes, said commodities analysis firm Shanghai JCI. Imports in the preceding week were almost negligible.

Most soybean imports by China last week were from the U.S.

Traders paid a premium of 145-150 U.S. cents/bushel to the CBOT September contract for soybean to be delivered in China from ports in the western U.S. in August.

Chinese crushers also struck a few deals in South American soybeans, with the premium for Argentine soybean at 150-160 cents/bushel and 250-260 cents/bushel for Brazil soybeans, all based on the CBOT September soybean contract and for delivery to China in August.